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Font readability

I was pleased to see the discussion on font readability. I come down
on the side that serif font is better for text, but I noticed that in
the IRS instructions a few years ago, they used sans serif in a really
tiny font, probably about 7 points. Someone told me that when font
gets that small, the serifs just add clutter.

Several people mentioned that sans serif is harder to read because the
letters aren't distinct enough from each other. One illustration of
this is the word "Illinois." If I type it in most sans serif fonts,
the capital I and the two ll's look like all the same letter.

As for hard evidence, I think I recall reading somewhere that Janice
Redish and/or the Center for Document Design has done research into
this. Does anyone else have a more specific citation?